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Showing posts from March 22, 2011

High Coffee Prices May Not Be Enough to Increase Production

By Leslie Josephs The Wall Street Journal March 22, 2011 NEW ORLEANS—Some of the world's largest coffee companies are paying farmers more for the increasingly costly beans, but don't chalk it up to corporate responsibility. Ensuring supplies of coffee in the long term is vital, even at a higher price, executives say. Coffee prices have surged over the past year, largely due to production shortfalls, burning companies—and consumers—with higher costs. U.S. coffee roasters and retailers Starbucks Corp., Kraft Foods Inc. and Massimo Zanetti USA raised prices last week under pressure from climbing green-coffee costs. Arabica coffee futures on IntercontinentalExchange have risen more than 50% over the last six months after bad weather clipped output in top-producing nations such as Colombia. But the near-record prices fetched by mild washed arabica beans, prized by coffee drinkers for the rich flavors they produce, may not be enough to persuade farmers to expand produc...